DC Lite #316

1. Economic surprise. "The widely-followed Citi surprise index (black) is suspect. A few days ago, it painted a very negative picture and got lots of publicity, when a simple moving average of US data surprises (blue) says data are 'in line.' There's too much policy noise, but the US economy is fine."

2. Employment situation. "Multiple job holders hits a new high. Part time for economic reasons is also rising, highest level since July 2021 (coming off the COVID highs)."

3. Momentum unwind. JPMorgan argues "that their analysis of previous 'momentum' drawdowns suggests that the current retreat is 90% complete ... However, the bank also warns that if this a 'structural regime change' then the drawdown has further to go, with a potential pullback of 25% relative to the market."

4. Trump pain tolerance. "The history of Trump’s first term suggests a high pain tolerance for equity market weakness."

5. Tariff talk vs. EPS estimates. The 4 sector with the highest % of companies citing tariffs on earnings calls in Q4 are also the 4 sectors that have seen the largest YTD cuts to Q1 EPS estimates.

ICYMI

• Thu 3/6 #315: "The Nasdaq 100 $QQQ closed below its 200-day average for the first time in over a year. Watch the next 2 weeks"

• Wed 3/5 #314: "SPY put volume spiked yesterday to the 3rd highest in history"

• Tue 3/4 #313: "This signal suggests we could be reaching a short-term low in equities"

• Mon 3/3 #312: "The initial post-election stock market rally has largely faded"